Secondaries Exit Opportunities

Based on the most helpful WSO content, here’s what you need to know about exit opportunities from secondaries roles:

1. Exit Opportunities Post-Secondaries:

   • Secondaries is often considered an endgame for many professionals, with plenty of people staying within the industry long-term. However, if you decide to exit, the most common paths include:
     • Asset Management / Allocator Roles: These are natural transitions given the skill set developed in secondaries.
     • Corporate Development: Smaller corporate development roles are also a possibility.
     • Direct PE Roles: Transitioning back to traditional buyouts at the VP level can be challenging, especially without prior direct buyout experience. However, it’s not impossible, particularly if you can leverage your network and demonstrate transferable skills.
     • Hedge Funds or Fundamental Investing: While secondaries provide exposure to asset-level analysis, transitioning to a fundamental hedge fund role may require additional effort to prove your modeling and investment thesis skills.

2. Dynamic Nature of Secondaries:

   • The high-volume, asset-level analysis in secondaries can provide a strong analytical foundation. However, the 80/20 nature compared to buyouts may limit the depth of operational and strategic exposure that traditional buyouts roles offer. This could make it harder to pivot to certain roles like corporate strategy or M&A, where direct operational experience is often valued.

3. Big Name Secondaries Firms vs. LMM GP-Led Team:

   • Joining a big-name secondaries firm may provide stronger brand recognition and a broader network, which can be advantageous for future exits. However, being part of a new, high-performing team at an LMM GP-led secondaries platform could offer more ownership, responsibility, and visibility, which are valuable for career growth.
   • The decision ultimately depends on your long-term goals. If you prioritize climbing the ladder and gaining leadership experience, the LMM GP-led team might be a better fit. If optionality and brand recognition are more important, a big-name secondaries firm could be the safer choice.

4. Concerns About Siloing:

   • While secondaries can be a niche, the skills you develop—such as valuation, deal structuring, and portfolio management—are transferable to other areas of finance. However, the longer you stay in secondaries, the harder it may become to pivot to traditional buyouts or other roles that value direct investment experience.

5. Key Considerations:

   • If you’re unsure about long-term goals, prioritize roles that keep doors open. A stint in secondaries won’t necessarily close doors, but it may require more effort to pivot later.
   • Networking and maintaining relationships within the broader PE and finance community will be critical if you decide to transition out of secondaries.

In summary, the LMM GP-led secondaries role sounds like a unique and promising opportunity, especially if you’re confident in the team’s success. However, if maintaining optionality for traditional buyouts or other roles is a priority, carefully weigh the trade-offs between this role and a position at a big-name secondaries firm.

Sources: Secondaries Comp / Culture in 2023, Breakdown of Post-IB Exit Opportunities, Q&A: GS/MS IB Analyst —> Megafund PE Associate —> HBS/GSB Business School, The PE career path, From PE >> Startup >> Back to PE